Alamo Iron Works, a 135-year-old San Antonio-based iron foundry that moved from its longtime downtown location in 1990 to make way for the Alamodome, has filed for Chapter 11 bankruptcy, according to court records.

The company, which was one of the defendants at the center of the multimillion-dollar lawsuit over contaminated Alamodome soil, recently fell victim to the economic downturn, which crippled sales of its steel and industrial supplies, Chief Executive and President Anthony Koch said.

In its bankruptcy filing, the company listed $18.1 million in assets and about $19.4 million in liabilities, including almost $174,000 owed to the Bexar County tax assessor-collector’s office.

But the “crowning blow” for Alamo Iron Works came when FaulknerUSA, the city’s pick to build its flagship convention center hotel, failed to pay the company about $1 million for work on the Grand Hyatt hotel and Alteza condo project, Koch said.

On top of that, Alamo Iron Works said in court documents that it already has spent “several hundred thousand dollars in legal fees” fighting FaulknerUSA and plans to spend up to $150,000 more in a pending lawsuit. “As a result, we came to the conclusion we needed to have some investors come in that could invest in the company and keep it operating,” Koch said.

FaulknerUSA Chairman Mark Schultz disputes Alamo Iron Works’ claims and says the company was actually overpaid by about $2.6 million, which FaulknerUSA trying to get back through litigation.

“They’ve been paid to date ... a total $13.5 million by FaulknerUSA for this job,” he said.

Alamo Iron Works has been in discussions with Fort Worth-based investment firm Luther King Capital Management for several months. Luther King Capital Management could pay more than $8 million for certain assets of the company and has plans to expand the operation if the sale is approved by the court, Koch said.

But as part of that deal, King Capital Management required Alamo Iron Works to go through bankruptcy to “shed itself of some unnecessary assets and certain liabilities,” Koch said.

If the sale goes through, Alamo Iron Works would become a wholly owned subsidiary of Industrial Distribution Group, an Atlanta-based power tool supplier that also is owned by Luther King Capital Management.

“The plan is to substantially invest in the company and grow it a heck of a lot more than we’ve ever been able to do,” Koch said.

Alamo Iron Works — a powerhouse in the local manufacturing sector decades ago and a key supplier of steel for prominent local projects, including the downtown Menger Hotel and the old Ursuline Academy — currently employs 224 workers, according to court documents.

Though the plan is to invest and grow the company, “instead of shrink it,” Koch said “there’s no guarantee that everybody is going to have their jobs.”

The company has asked a bankruptcy judge for permission to pay its hourly wage employees for the week of work performed before its bankruptcy filing, about $70,000 in total payroll expenses, according to court records.

Additionally, Alamo Iron Works says it can tap up to $6.5 million in financing from its lender, PNC Bank, to keep its operation going through the bankruptcy and potential sale process, which is expected to wrap up by the end of May, Koch said.

Established in 1875, Alamo Iron Works was located at its near East Side location at Montana Street and Hoefgen Avenue for 115 years until it was displaced in 1990 to build the Alamodome. Now the company is located blocks from the AT&T Center.

The company also was embroiled in litigation over contaminated soil at the Alamodome site and eventually agreed to settle for $525,000. As part of the settlement, the company agreed to give the city $300,000 in discounts for 15 years on the goods and services it purchased.

From a product perspective, Alamo Iron Works possibly is best known for its manhole covers, but reaps about 70 percent of its revenue from the distribution of 40,000 different industrial supply products, including paints, lubricants and welding equipment.

The rest of the company’s revenue is derived from its steel service center, steel and rebar fabrication, machine shop and foundry operations.